How Company Culture Can Save Your Organization From Potential Fraud

What can businesses do to fight the likelihood of fraud occurring within their organization?

You might be surprised to find that it all starts with 𝗰𝗼𝗺𝗽𝗮𝗻𝘆 𝗰𝘂𝗹𝘁𝘂𝗿𝗲.

A healthy culture can significantly mitigate fraud risk and act as a deterrent to unethical behavior. Companies can start by building a culture of honesty and high ethics with these 5 tips:

• 𝗠𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝘀𝗵𝗼𝘂𝗹𝗱 𝗺𝗼𝗱𝗲𝗹 𝗯𝗲𝘀𝘁 𝗽𝗿𝗮𝗰𝘁𝗶𝗰𝗲𝘀 𝗮𝗻𝗱 𝗲𝘁𝗵𝗶𝗰𝗮𝗹 𝗯𝗲𝗵𝗮𝘃𝗶𝗼𝗿. This is the embodiment of "Tone At The Top." If employees are expected to work in an honest and ethical manner, senior management should lead by example.

• 𝗛𝗶𝗿𝗲 𝘁𝗵𝗲 𝗿𝗶𝗴𝗵𝘁 𝗲𝗺𝗽𝗹𝗼𝘆𝗲𝗲𝘀. Too often, workers get hired in a hurry due to a backlog of work that needs tending to. Employees should be sufficiently vetted during the interview process and their references should be checked, especially when their role involves financial documents or money.

• 𝗦𝗲𝘁 𝗮𝗻𝗱 𝗰𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗲 𝗲𝘅𝗽𝗲𝗰𝘁𝗮𝘁𝗶𝗼𝗻𝘀. It's important to build clarity around what employees can and cannot do, such as clocking in/out for their coworkers or what costs are appropriate for an expense report. Employees should be asked to acknowledge this code of conduct.

• 𝗖𝗿𝗲𝗮𝘁𝗲 𝗮 𝗽𝗼𝘀𝗶𝘁𝗶𝘃𝗲 𝘄𝗼𝗿𝗸 𝗲𝗻𝘃𝗶𝗿𝗼𝗻𝗺𝗲𝗻𝘁. Company culture should be built with honesty and transparency as its core tenets. The more these qualities are exemplified and encouraged, the less likely fraud will occur, and the more likely it will be reported if it does.

• 𝗘𝗻𝗳𝗼𝗿𝗰𝗲 𝗽𝗼𝗹𝗶𝗰𝗶𝗲𝘀 𝗳𝗼𝗿 𝗵𝗮𝗻𝗱𝗹𝗶𝗻𝗴 𝗳𝗿𝗮𝘂𝗱. Building systems that make successful fraud difficult to achieve can help mitigate the risk. Supporting whistleblowers (such as through anonymous hotlines) is one important step companies can take to promote prevention and fraud reporting.

What changes will you make to improve company culture?